Real-world assets (RWAs) are emerging as one of the next mega trends in the crypto space, and according to a recent study by K33 Research, Chainlink could profit in a big way from this trend. In a recent study, the research firm projected that LINK would be the “safest bet” to capitalize on this impending boom. This sentiment reflects the broader industry outlook, especially given BlackRock CEO Larry Fink’s earlier comments in May where he noted the potential of tokenization in securities.
“The next generation for markets, the next generation for securities, will be tokenization of securities,” remarked Larry Fink during a New York Times DealBook event. He further elucidated that tokenization, which is the creation of a digital representation of an asset on a blockchain, would facilitate “instantaneous settlement” and notably reduce transactional fees.
The growing interest in the tokenization of RWAs, which includes traditional financial instruments like private equity, credit, and bonds, has paved the way for the increasing valuation of LINK. Tokenization is no longer a buzzword but a mechanism to optimize financial transactions by reducing costs, streamlining operations, and enhancing transparency and accessibility.
David Zimmerman, an analyst at K33 Research, mentioned, “If we wish to have exposure to the RWA narrative and avoid being sidelined when it takes off, LINK is the safest bet.”
Global financial institutions and emerging cryptocurrency platforms are gearing up to leverage this trend. A testament to this is JPMorgan’s recent announcement about its first live blockchain-based collateral settlement transaction, which involved industry giants BlackRock and Barclays.
Chainlink, as a project, has strategically positioned itself in this domain, acting as a bridge between blockchains and the external world. The project’s unique system of oracles and an expansive list of partnerships emphasize its pivotal role.
“Chainlink, with its system of oracles and wide partnerships, is well-positioned to connect blockchains with real-world data, making it a strong player in the RWA narrative,” stated renowned crypto analyst Scott Melker, echoing Zimmerman’s insights.
Zimmerman further opined that while Chainlink might not record the highest gains in this RWA movement, its robust infrastructure and pivotal role in the ecosystem make it one of the most well-placed projects to harness the potential benefits.
Despite the undeniable potential and traction that RWAs have gained, Zimmerman highlighted potential challenges in realizing their full potential. Yet, the prevailing narrative’s allure is so compelling that we might witness “an isolated RWA crypto bubble” even before its tangible real-world impacts become ubiquitous.
Zimmerman’s advice to potential investors is to be patient. The recommendation is to wait for the token to hit the long-term support level of around $5.70 before diving into long positions.
LINK Price Remains Trapped In Trend Channel
The Chainlink price has been trading within a descending trend channel since June last year. Even the recent hype around the partnership with Swift and the SmartCon was not enough to push LINK out of the trend channel. In total, LINK has been rejected at the upper trendline six times, last on October 1.
A bullish sign at the moment is that Chainlink is holding above the 50% Fibonacci retracement at $7.19 despite the sharp correction in the broader crypto market. If this holds over the next few days, LINK could attempt a retest towards the upper resistance line.
If the support breaks, K33 Research’s scenario could come true and Chainlink could fall below the $6 price again. Thus, the support is instrumental in determining whether Chainlink is currently a buy or sell.
Featured image from Shutterstock, chart from TradingView.com